Global instability, escalating conflicts, complex sanctions, and the pursuit of decarbonisation are only some of the issues the maritime industry must contend with this year. In this article, our marine and shipping partners Pav Samothrakis and Alexis Petrou and legal assistant Alexandra Shishkareva explain how these factors will impact the sector.

The geopolitical risks

The Red Sea and Gulf of Aden have become critical hotspots since 2023 due to escalating attacks on commercial vessels by Houthi rebels in Yemen, forcing ships to reroute via the Cape of Good Hope, increasing voyage times and costs. Shipowners have had to implement Best Management Practices (BMP5) to enhance security in high-risk areas. This is alongside other measures, including risk assessments, armed security personnel, and collaboration with military forces. The Russia–Ukraine war, Israel-Hamas tensions, and disputes in regions such as Syria, Yemen, and the South China Sea, have added to geopolitical risks that many companies in the industry have to continue to navigate.

The inauguration of the Trump administration this month creates further uncertainty for the maritime industry. Potential shifts in US foreign policy, trade agreements, and sanctions could have far-reaching effects on international shipping routes, regulatory frameworks, and energy markets.

Cyberattacks in the maritime industry

There has been a rise in cyberattacks affecting the industry, and several major shipping companies have been targeted by ransomware, resulting in multimillions in financial losses. Not only are the financial losses extreme, but it can also cause reputational damage to companies. In response, shipping companies continue to invest in enhanced network security, endpoint protection, and cyber insurance, along with crew training to prevent issues such as phishing and social engineering threats.

How is sanctions compliance changing?

Sanctions compliance has grown increasingly complex. Authorities, such as the U.S. Office of Foreign Assets Control (OFAC), are targeting evasion tactics such as AIS manipulation and deceptive ownership structures. The growth in the number of rogue traders and “dark” and “grey” fleets has disrupted global energy markets, with the EU’s December 2024 sanctions package further highlighting these challenges, addressing shadow fleets and circumvention tactics.

Maritime companies must conduct rigorous due diligence on counterparties to help mitigate risks. Beyond sanctions checks, this includes initial and ongoing evaluation of creditworthiness to reduce exposure to payment defaults, which are becoming more prevalent, alongside difficulties in recovering funds from defaulting entities.

The challenges faced by decarbonisation

The International Maritime Organization’s net-zero emissions target may not be set until 2050; however, decarbonisation remains a critical challenge. Transitioning to low- or zero-carbon fuels like hydrogen, ammonia, and methanol is hindered by high costs, limited availability, and inadequate infrastructure for production and distribution. Whilst it may seem like a long time off, maritime companies must begin to be proactive in their efforts to help reach this target.

Retrofitting or replacing vessels with energy-efficient designs requires significant investment, and regulatory uncertainty and inconsistent global policies further complicate progress. Collaborative efforts across nations and innovative solutions are essential to achieving sustainability goals.

How can marine and shipping companies manage global instability?

Managing risks amid such global instability demands a proactive and comprehensive approach. Commercial contracts must include provisions for alternative routes, risk allocation, and indemnities while ensuring compliance with evolving sanctions regimes and war risk exposures. Proactive communication with stakeholders, such as insurers and charterers, is crucial to minimising disruptions.

To reduce the risks posed by these issues, maritime companies must enhance their due diligence. They can do this by encompassing up-to-date sanctions compliance programs, training on regulatory changes, and detailed risk assessments for voyages in high-risk regions. Regular evaluations of counterparties are also essential, to mitigate financial and legal risks. Seeking expert legal and risk management advice should go some way to ensuring contractual and operational resilience in this volatile landscape.

If you have questions or concerns about any marine and shipping issue, please contact Pav Samothrakis and Alexis Petrou.

For further information please contact:

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.